Tuesday, June 03, 2014

Raising School Funding by 20% Results in a $20 Million Increase in Lifetime Earnings Per Classroom

At age 28, the old-est age at which we currently have a sufficiently large sample size to estimate earnings impacts, a 1 SD increase in teacher quality in a single grade raises annual earnings by 1.3%. If the impact on earnings remains constant at 1.3% over the lifecycle, students would gain approximately $39,000 on average in cumulative lifetime income from a 1 SD improvement in teacher VA in a single grade.

Multiply that times 30 and you get $1,170,000 for a whole class. Wow! ONE MILLION DOLLARS.

For low-income students who spent all 12 years of school in districts that increased spending by 20 percent, graduation rates rose by 23 percentage points. Due to the measurement error or “noise” found in almost any study of this type, the effect could, very plausibly, be as low as 8.7 percentage points and as high as 37 percentage points. The estimates are based on the study’s analysis of 15,000 children born between 1955 and 1985. All account for a host of other potential explanations, such as school desegregation, War on Poverty programs, and demographic changes. ...

Between the ages of 25 and 45, these same children were 20 percentage points less likely to fall into poverty during any given year. (Estimates vary from 8 percentage points to 31 percentage points.) Their individual wages were 25 percent higher than they would have been without the changes, with estimates ranging from 3 percent to 45 percent, according to the paper. And their family incomes were 52 percent higher, with estimates ranging from 17 percent to 86 percent.

OK, let me get out the back of an envelope... 25/1.3... $22,500,000 per class/lifetime.

Yeah, that's probably baloney, but is it more or less so than the rest of this stuff?